In the post-dotcom bubble of the early 2000s, attitudes towards tech investment changed.
Where previously exuberant spending, fueled by low interest rates, was rife, the inevitable crash, caused by a confluence of illiquid businesses and sell-offs from expiring IPO lock-ins, brought an end to what Sir John Templeton referred to as ‘temporary insanity’.
With exchanges such as the Nasdaq Composite falling 740 per cent between its peak in March 2000 to October 2002 - and a slew of failures including Boo.com, WorldCom and NorthPoint Communications - attitudes towards investment chilled as the market reassessed the sector. If there was one positive outcome, it was that the mass spending had included future-proofing digital infrastructure - a vital component of the internet’s next chapter.
Except for Amazon and Google, which launched in 1994 and 1998, respectively, interest generally shifted from e-commerce and services to interactive connectivity and the dawn of social media. In rapid succession, LinkedIn, The Facebook (as it was then known), YouTube, and Twitter debuted in consecutive years from 2003 –06, with Instagram and Snapchat launching four and five years later.
In realising that mass attention was always a key component of corporate proliferation, each of these businesses developed in three phases.
- By capitalising on their meteoric user bases to monopolise the nascent digital advertising space.
- By controlling narratives at the behest of corporate sponsorship or governmental influence.
- By expanding their sphere of influence by either buying or developing complementary services such as P2P voice and video calls.
As a result, today's social/digital advertising landscape effectively boils down to four companies: Alphabet, Meta, Microsoft, and X, which, as an aggregate, possesses the unhealthy and undemocratic power to shape opinion and influence elections, while remaining a breeding ground for false information and divisive propaganda.
Recent examples of false narrative control include Facebook’s compliance with the FBI over the Hunter Biden laptop story as Russian propaganda; Twitter’s January 2021 suspension of a sitting President’s account; and YouTube’s removal of videos which criticised vaccine efficacy.
At no stage have any of these companies faced prosecution for their actions despite contradicting a variety of fundamental civil rights, including informed democracy or choices over personal healthcare. In more recent years, the same businesses have also been advocates of gender identity politics, which has already caused an untold amount of psychological damage to a generation of children and teenagers while unnecessarily dragging transgenderism from a term correctly designated to a small minority of individuals to become a powerful political ideology.
Rationale for buying Twitter
For a man whose existing businesses include Tesla and Space X, there is speculation over why Elon Musk purchased Twitter at a premium. A recent article in Fortune suggested saving it from ‘falling off a cliff’, while others cite his self-described position as a ‘free speech absolutist'.
When asked on the Joe Rogan podcast what it was that ultimately led him to buy Twitter, Musk responded, "I was worried that it was having a corrosive effect on civilisation”. Elaborating on the platform's heavily subjective messaging, Musk shared his opinion about the perceived dangers of Twitter under its former management, and why it posed a social risk.
Relating to the philosophies of Twitter's former owners, stating that certain viewpoints and ideas would typically be ‘quite niche and geographically constrained so the fallout area would be limited’, Musk made it clear that Twitter was being used as an ‘IT weapon to propagate a mind virus to the rest of earth. And the outcome of that mind virus is very clear if you walk around the downtown streets of San Francisco. It is the end of civilisation. In order for the virus to propagate it must suppress opposing viewpoints’.
Certainly, the Twitter purchased was not the Twitter the new management had in mind.
Following the immediate firing of CEO Parag Agrawal and policy director Vijaya Gadde, 80 per cent of staff were laid off post-acquisition, citing that ‘drastic action’ was required to correct a ‘$3 billion negative cash flow situation’.
Since then, the company has returned to ‘roughly’ breaking even. However, this hasn't come without its challenges.
According to a post in July, Musk said that advertising revenue had fallen by around 50 per cent and that reaching a positive cash flow would be needed before having the luxury of anything else. Indeed, the hiring of Linda Yaccarino, former chairman of global advertising and partnerships for NBCUniversal, as CEO would suggest that ad revenues will remain an essential part of X's cash flow, albeit to diversify into other streams as part of entrepreneur’s 'everything app' solution.
'Thread' laid bare
Whether initiated by the prelude of Twitter's high-profile sale or whether the Meta team had been targeting a rival product, the launch of Threads, an Instagram app designed to provide a similar experience to X, was unveiled and initially launched on July 5 to much fanfare. W ith 10 million downloads within the first seven hours of its launch, it became the most downloaded non-game app on launch day in the past decade before quickly exceeding 100 million users; however, the success appears to be short-lived. According to a recent article in Time, “Exactly six weeks later, Threads is fading fast. After peaking at around 50 million daily active users on Android devices worldwide in early July, that number has steadily declined and is now hovering around 10 million, according to the digital intelligence platform Similarweb. That’s less than a tenth of X’s usership.”
It is worth mentioning that in the same month of Threads’ launch, Musk posted that X had reached a ‘new high’ for users, showing the latest count as over 540 million, considerably more than the 229 million active monthly users confirmed in May 2022.
As the primary decision-maker behind purchasing Instagram and WhatsApp, Mark Zuckerberg’s last two ventures of the Metaverse and Threads have illustrated that past successes are no guarantee of the future, particularly when going head-to-head with an existing brand, which neatly brings me to the decision to rebrand Twitter to X.
“There was plenty wrong with the product, but the brand was in the top tier of companies in the world. Names as diverse as Barack Obama, Kim Kardashian, The Rock, and Greta Thunberg would all use the name and help promote the platform. Musk destroyed all of that.”
These were the sentiments of Bruce Daisley, the former head of Twitter's European operations, who suggested that Twitter had been in ‘brand heaven’.
For Musk, replacing the brand was likely as important as purging non-essential staff from the company. As a platform initially designed for 140 characters, his vision for an all-encompassing digital solution no longer suited the former brand.
In effect, it would be better to think of his purchase as a digital infrastructure acquisition rather than an attempt to continue a business already consumed by its own wokery. With all this being said, what progress has been made towards X's long-term vision, and how will it sit in a competitive landscape?
Mimicking the success of WeChat, the all-encompassing app which manages all aspects of life in mainland China, Musk has already stated his vision to include audio, video, messaging, payments and AI while privately musing about a blockchain-based platform with crypto functionality.
Having identified the numerous challenges faced by companies surrounding LinkedIn, such as its shadow banning policies to the company’s self-proclaimed issues surrounding fake accounts, which included the detection and removal of 21 million accounts in H1-2022, Musk wanted to provide an alternative to digital recruitment by launching ‘Hiring’ in July 2023.
Currently available to verified organisations, Hiring allows companies to post job cards, which provide a direct link to the application landing page, and while this comes with a hefty price tag of $1000 per month, X has the advantage with more than 118 million companies using it, over just 61 million that use LinkedIn.
Additionally supported by Musk's critique that "People send me LinkedIn links sometimes, but the cringe level is so high that I just can't bring myself to use it, so I ask for the resume or bio to be emailed. We will make sure that the X competitor to LinkedIn is cool."
In a return of fire to Meta, X’s latest addition is entering the arena of video and audio calls, which appeared to launch with no formal announcement on October 25, with some users noticing a feature under the direct message portion of the app. While CEO Linda Yaccarino had confirmed there would be a new feature back in August, nothing was specified outside of it adding towards the platform's transition.
The 'everything app'
Before completing the takeover of Twitter on October 27, 2022, Musk described the deal as an ‘accelerant to creating X, the everything app’. While he continues to have his detractors and critics, he will likely succeed because of one simple fact.
Unlike many of his peers, Musk understands what most tech users want. It isn't to be lied to; it isn't to be sold propaganda, and it isn't to have their voices silenced for profit or political leverage. It is to connect, interact, share, and discuss without intervention or moderation.
While eccentric, Musk is made all the more relatable through his risk-taking and willingness to recognise and call out delusional behaviour for what it is. In this, he has secured more trust in his products than many of his peers and will likely garner the support of those who hail the advent of a digital platform based on traditional moral values without third-party involvement.